Appraisal myths debunked

Legally, an appraiser has to be state certified to create substantiated real estate appraisals for federally-backed sales. The law gives you the right to get a copy of your completed report from your lender after it has been provided. Contact us if you have any concerns about the appraisal procedure.

Myth: Assessed value will always be the same as to market value.

Fact: This usually isn't true; most states do support the idea that the assessed value is the same as market value, but not always. Interior remodeling that the assessor is not aware of and a dearth of reassessment on nearby homes are perfect examples of why this occurs.

Myth: Depending on if the appraisal is provided for the buyer or the seller, the opinion of value of the home will vary.

Fact: The appraiser has no vested interest in the result of the appraisal and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is written.

Myth: The replacement cost of the house will be is on par with the market value.

Fact: The way market value is arrived at is based on what a buyer would likely pay a willing seller for a home without being under pressure from any external party to buy or sell. Replacement value is the dollar amount required to rebuild a home in-kind.

Myth: Specific formulae, such as the price per square foot, are the ways appraisers use to come to the worth of a home.

Fact: There are many numerous processes that an appraiser will use to make a full investigation of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the opinion of value of recently sold comparable properties.

Myth: When the economy is robust and the worth of properties are found to be rising by a certain percentage, the other homes in the vicinity can be expected to appreciate based on that same percentage.

Fact: Any price at which an appraiser concludes in regards to a specific house is always individualized, based on certain factors found from the information of comparable houses and other specifications within the house itself. It doesn't matter if the economy is on the rise or declining.

Myth: You can commonly see what a house is worth simply by looking at the exterior.

Fact: There are a multitude of different variables that show the value of a house; these factors include location, condition, improvements, amenities, and market trends. An exterior inspection certainly can't provide all of the data necessary.

Myth: Since you're the one funding for the appraisal when applying for the loan to buy or refinance real estate, you own the ordered appraisal.

Fact: Legally, the report is owned by the lending agency unless the lender relinquishes their interest in the document. Consumers have to be supplied with a version of the appraisal report upon written request as per the Equal Credit Opportunity Act.

Myth: Consumers need not be concerned with what is in their appraisal so long as it exceeds the needs of their lending agency.

Fact: Only if consumers read a copy of their appraisal report can they ensure its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An appraisal can serve as a record for the future, since it contains an incredible amount of data - including, but not limited to the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the area.